Key Highlights

● Dell rose 11.06% to $371.35 as AI server stocks rebounded.

● Dell had fallen 37% over the past month before the rebound.

● Fiscal second-quarter Revenue rose 58% to a record $47.0 billion.

● Dell ended the quarter with a $95 billion AI Backlog and raised its outlook.

What lifted Dell Technologies (NYSE:DELL) on Wednesday was a sharp rebound across AI server stocks after CoreWeave (NASDAQ:CRWV), one of the biggest buyers of AI computing hardware, reported a stronger quarter than expected and said it would spend even more on capacity next year. For Dell, which had fallen further than its peers over the previous month, the relief was especially pronounced.

Dell shares rose 11.06% to $371.35, on Volume of 3.02 million shares, giving the company a Market Value of about $236 billion. Super Micro Computer (NASDAQ:SMCI) gained about 8% and Hewlett Packard Enterprise (NYSE:HPE) about 6% in early trading. The S&P 500 rose 1.31%, and the PHLX Semiconductor index jumped 5.7%.

CoreWeave's spending plan revives the server trade

CoreWeave reported third-quarter results after the bell on Nov. 10, beating estimates and raising its 2026 revenue guidance to $13 billion to $13.3 billion. It reported a revenue backlog of $132.5 billion and lifted its 2026 Capital spending range to $37 billion to $39 billion. It also said it would fund expansion largely through contract-backed financing and customer prepayments, which eased concerns about how AI Data Center buildouts will be paid for.

That matters directly to Dell. Capital spending by AI cloud providers is, in large part, spending on the kind of rack-scale, liquid-cooled server systems Dell builds. A bigger budget from a major neocloud customer, paired with a more credible funding plan, revived confidence that the order pipeline remains intact.

The bounce came after a punishing stretch. Dell fell 37% over the past month, more than either HPE, down 31%, or Super Micro, down 28%. Dell had lost about 45% in a month at one point and fell 11% on Nov. 5 alone, after the Nov. 3 midterm elections handed Democrats control of Congress. In Texas, Governor-elect Gina Hinojosa has promised to ban new data center approvals, though she cannot act until she takes office in January. Outgoing Governor Greg Abbott paused new data center permits in September pending a state audit. Dell also rose 6.19% on Nov. 9, as investors began returning to the group.

What Dell does

Dell sells servers, storage and networking equipment through its Infrastructure Solutions Group, and PCs and peripherals through its Client Solutions Group, with financing and services layered on top. The infrastructure side has become the growth engine as Dell builds and delivers full AI server racks to cloud providers, sovereign customers and large enterprises. The PC Business matters too: expectations for a faster commercial PC refresh cycle, driven by AI-enabled devices and operating system upgrades, have supported the Client Solutions outlook, even as some forecasts call for PC shipments to decline. The company joined the S&P 500 in September 2024, when S&P Dow Jones Indices added it alongside Palantir Technologies (NASDAQ:PLTR) and Erie Indemnity (NASDAQ:ERIE).

Results and guidance

Dell's fiscal second quarter, which ended July 31, was the strongest in its history. Revenue rose 58% to a record $47.0 billion. Infrastructure Solutions revenue jumped 89% to $31.8 billion, including $16.4 billion from AI-optimized servers, double the prior year, and $10.5 billion from traditional servers and networking. Client Solutions revenue rose 20% to $15.0 billion. GAAP diluted Earnings were $6.34 per share and non-GAAP earnings were $7.04, up 203%.

Dell booked $60.9 billion in AI server orders during the quarter and ended it with a $95 billion AI backlog. Management raised its fiscal 2027 revenue outlook by $25 billion to $192 billion, up nearly 70%, and its AI server revenue forecast to $74 billion from $60 billion. It now expects full-year non-GAAP earnings of $25.50 per share. For the third quarter, Dell guided for revenue of about $49.0 billion and non-GAAP earnings of $6.50 per share. Chief Financial Officer David Kennedy said the company was "raising our full-year FY27 revenue outlook by $25 billion."

Valuation

Dell's trailing P/E is 21.56. Based on management's full-year non-GAAP earnings guidance of $25.50, Wednesday's price equals roughly 14.6 times this year's expected earnings. Dell traded at 14 times forward earnings on Nov. 5, down from 26 times in mid-August and near its five-year average of 12 times. For comparison, Broadcom (NASDAQ:AVGO) trades at a trailing multiple of about 44.7 and Nvidia (NASDAQ:NVDA) at 22, two of the chip suppliers whose products Fill Dell's servers.

Bull and bear points

The bull case is a backlog that dwarfs the current revenue plan. The $95 billion AI backlog is about 28% larger than Dell's entire fiscal 2027 AI server revenue target, and management said Demand outran Supply last quarter and this one, with the pipeline remaining "robust." A valuation that has compressed back toward its historical average gives the stock room to rerate if the backlog converts on schedule. Analysts have issued multiple Buy ratings over the past month.

The bear case starts with cash and margins. Free Cash Flow fell 47% to $986 million last quarter, and inventory and loans to customers consumed $17.3 billion of cash in the first half of the year. AI servers carry thin margins, and the coming report must show backlog converting to shipments without Margin erosion. Supply is a constraint: management summed up its component bottleneck as "DRAM, DRAM, DRAM, followed by NAND, NAND, NAND." Political risk remains, because a Texas moratorium would affect data centers not yet built, which are the orders behind next year's estimates. And higher rates loom, with Chicago Fed President Austan Goolsbee calling October's Inflation report "borderline disturbing."

The Nov. 24 Report and Backlog Conversion

The calendar is crowded. Nvidia reports on Nov. 17, and its results and commentary on customer demand could move Dell, Super Micro and HPE together. Dell's own third-quarter report follows on Nov. 24. Investors will focus on whether revenue meets the roughly $49 billion guidance, how fast the $95 billion backlog is converting, whether AI server margins hold up, and whether management maintains its $192 billion full-year outlook amid memory shortages and political noise around data center construction.